Hi Lukebe2,

Thanks for your post and welcome to the forums.

It’s a little complicated to explain in one or two sentences, but such a structure allows you to control the asset (and the income from the asset) without actually having to own it in your own name.

As such, if you get sued as an individual, the asset cannot usually be taken as you don’t own it.

The idea behind having a corporate trustee is to minimise the liability of the trustee (i.e. it has no assets other than a small amount of cash on hand).

This is not necessarily an absolute must, but it does ‘bed down’ the idea of complete asset protection.

Hmmm – the FHOG only applies to property you intend living in as your home. In many cases the perceived benefit of FHOG is swallowed up but other aspects in the deal.

Ultimately, you need to crunch the numbers and weigh up lifestyle and personal decisions. As a general rule, I don’t let tax decisions run the investment, I run the investment for profit while also trying to pay the lowest tax legally possible.

You should expect to pay about $2,000 for a coy/tust set up, and then $1,000ish per annum to cover compliance and accounting fees. It’s not cheap, so be sure to weigh up the cost:benefit.

Have a very merry Christmas,

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Rob,

I sense you touch on an obscure yet important point. Can you please expand or perhaps add some links where those interested could find more info?

BTW, welcome back. I look forward to reading and learing from your posts.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Domo,

Here’s the link:

https://www.propertyinvesting.com/forum/topic/8788.html

Please discuss future matters on that thread.

Thanks,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Aussie,

It’s an interesting point you make.

I notice that the last round of REIA stats had the Melbourne median house market falling by around 15%.

However, I regularly look through the local paper and see houses in Ringwood etc. sill priced at $350k+.

Sure, I think we are off the highs, and asking price is not necessarily the price you’ll get, but value shaven’t fallen by as much as I would normally expect to bring them back into the realms of affordability for the first-time buyer.

What do other people think?

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Aussie,

Thanks for your feedback. I’m delighted that you enjoyed the book, but even more so that you gained a few insights about how to improve your investing.

Warm regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Yack,

I couldn’t disagree more. It’s the application has changed, the theory remains as relevant as ever.

To this day I continue to use and apply the 11 Sec. Solution as a rule of thumb to help understand the relationship between:

* purchase price
* current rent
* liklihood that it will be +ve cashflow on a buy and hold basis.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi SusanJ,

Thanks for your post and welcome to the forum.

Note: I have assumed that the property came with clear title (i.e. no existing debt), and that you want to keep it rather than sell it.

The easiest way forward is to seek out a mortgage broker to help you arrange a loan for $60k. As this is only 50% of the current value, you shouldn’t have too much difficulty in sourcing funds (subject to what you earn as an income).

As MH says below… what happens next is your solicitor arranges for the title to revert to your name (rather than joint names) on an agreed date when your loan funds become available.

If it was suitable, what I would also say to your sister is not to offer 50% of the $120k, but 50% of a slightly less amount to reflect that if you had of sold it then, because of sale costs, the actual monies received would have been less than 50% of the gross $120k.

Such an adjustment / negotiation seems only fair as you shouldn’t be penalised for deciding to stay in the investment.

Now – are you keeping this property as an investment? If so, what are you hoping to get out of it in terms of income and cap growth?

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Welcome to the forum, and thanks for reading my books.

You have picked up on:

but don’t forget that:

As such, I’d suggest trying to find a deal that looks attractive and then shop it around. Perhaps even get in touch with another bird-dog and ask them to refer it to his or her (mini cough, splutter, wink) database for a cut of the profit.

Ultimately, someone else has ‘the market’ if you can provide the right deal.

Good on ya for giving it a red hot go. It won’t be easy, but it can be done.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hey mate,

You’re more than welcome! Please report back with your decision / research / more questions.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Olivereindeer (nice alias!),

I agree with Westan, since, from my experience it is better to solve a prior spending problem than it is to seek more money.

Having said that, books such as ‘The Richest Man in Babylon’ (which are a great read) suggest that you should pay off your debts at the same time as building your wealth.

To answer your questions though:

At least moderate results, provided you cease the behaviour that landed you in debt in the first place. It’s the old adage – to get out of a hole you first have to stop digging.

Borrowing may be difficult (given that your serviciabilty will be affected by your current debt). That leaves two choice:

1. Repay the debt
2. Establish another entity to borrow through and sign as a guarantor rather than the borrower.

This second option may still prove problematic.

Honestly though, I can’t promise beer and skittles, yet if you work hard there’s no reason why you can’t win.

Yes – get out of debt asap, especially if the interest on your debt is non-deductible.

That is, you may find that the best use of your money (talking after-tax returns) is to repay debt, as to repay $100 of non-deductible interest you will need to earn more in gross pay.

On top of that, also start saving at least 10% of your gross income so that you have some cash to get going once your financial situation improves.

Well, that’s a good starting point, but be more specific with your goals. For example:

* Who much cash do you want to have saved up?
* How much debt will you have owing?
* Where will you be living?
etc. etc.

Finally, now or never indeed! Cease the motivation to take drastic action, as there is never a better time to get started than right now.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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